-LRB- CNN -RRB- -- International Correspondent Fred Pleitgen reports from the site of E1 , a controversial settlement that the Israeli government plans to build .

What is E1 ?

I was standing on the barren hilltops East of Jerusalem and it is hard to believe the area could be at the center of an international controversy . E1 stands for East 1 and marks territory that the Israeli government has slated for settlement construction in the West Bank . It 's about 12 square kilometers -LRB- 4.6 square miles -RRB- , and when completed will touch the outskirts of Jerusalem .

The construction in the E1 area would be an expansion of one of the largest Israeli settlements in the West Bank , Ma'ale Adumim , with about 40,000 inhabitants , and would merge it with the greater Jerusalem area .

Why has the plan caused so intense international reaction ?

After the United Nations General Assembly vote on November 29 to grant the Palestinians the status of a non-member observer state in the body , Israel announced settlement construction in the West Bank and East Jerusalem as a response , saying part of that would likely take place in the E1 area .

The Palestinians believe construction here would essentially cut the West Bank in half and could also impede access from the West Bank to East Jerusalem , which the Palestinians would like to see as the capital of any future Palestinian State . In an interview with CNN , the Palestinians ' chief negotiator Saeb Erekat condemned the plan saying : `` There is no chance for a Palestinian state . I mean it is impossible . Anyone who looks at the map , looks at the geography will know exactly that this decision means that there is no more two-state solution . ''

How many Israeli settlements are there ?

According to the settlement monitoring group Peace Now , there are currently 137 Israeli settlements in the West Bank , with about 325,000 inhabitants in total . The settlements are essentially Israeli towns of various sizes in Palestinian territory . Many of them , like Ma'ale Adumim , look almost like any other Israeli town with everything from supermarkets to shopping malls and schools .

What is their legal status ?

The legal status of the settlements is in dispute . The United Nations and many scholars of international law consider them illegal , but Israel and some experts like the late Eugene Rostow of the Yale Law School and Julius Stone , international law professor at the University of Sydney , have said they are legal . The Palestinians want Israel to give up most settlements as part of any future two-state solution , but many believe that is not realistic considering the size of some of them .

How do settlements impact the peace process ?

Settlements are one key reason why there have been no negotiations between the Israelis and Palestinians for several years . The Palestinians say they will only return to the table if Israel freezes all settlement construction , while Benjamin Netanyahu 's government wants negotiations without preconditions . The dispute over new construction in the E1 sector is adding fuel to the fire and the U.N. believes it might destroy any chance of a two-state solution for good .

How would ordinary Palestinians be affected by E1 development ?

For average Palestinians in the area , the concerns are immediate . Attala Titi , a taxi driver in the town Eizzaria near Jerusalem , told me he fears additional detours and checkpoints if settlements are constructed in the E1 area . `` If they build this settlement and close off our roads it will mean that my trip from Hebron to Jericho would take between five hours to a whole day . ''

How about people currently living in the settlement ?

Ma'ale Adumim 's Mayor Benny Kashriel is happy at the prospect of expanding the settlement , a project that has been on hold for years .

`` This place , this residential neighborhood , it is in the Ma'ale Adumim municipality , part of Ma'ale Adumim municipality , government land . It has to be built for our young couples , '' he told me from his office .

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Israel plans to begin construction of settlements in the East 1 , or E1 , zone in the West Bank

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Comes after the U.N. voted to grant Palestine non-member observer status

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Palestinians believe construction here would essentially cut the West Bank in half

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Group : Currently 137 Israeli settlements in the West Bank , with about 325,000 inhabitants